The U.S. Senate’s version of the Inflation Reduction Act, which passed in that legislative body Sunday and is headed to the House, originally extended subsidies for two years. When the final version came to a vote, it was extended for three years, meaning the subsidies will last until at least a year into the next presidential term.
This part of the bill is glossed over while so much attention is being paid to the climate change and corporate tax parts of the legislation. But for millions of Americans who get their health insurance through the Affordable Care Act exchange, the legislation will prevent sky-high increases in monthly insurance bills. Some people’s health insurance costs would have gone up 50% to 100% at the end of this year.
As I have explained over the last several weeks, the provision of the bill that would allow Medicare to negotiate with pharma companies for drug prices survived Senate scrutiny. But don’t expect much change for a couple of years, and even then, Medicare will only negotiate the prices of 10-15 drugs per year.
Another important element of the Senate-approved legislation is the section that redesigns Medicare's Part D drug plans. In the future, people on Medicare wouldn't pay more than $2,000 a year for medications bought at the pharmacy. And the bill says that in the future, Medicare recipients won’t have to pay for vaccinations, such as vaccines to protect against shingles.
There is also a provision that affects people other than Medicare recipients. The Inflation Reduction Act caps what Americans pay for insulin at $35 a month, both for people covered by Medicare and by private insurance.
How will the 15% corporate minimum tax work?
The Inflation Reduction Act’s most controversial element is the part that imposed a 15% tax on big corporations. This single tax will pay for 40% of the energy investments that make up the spine of the climate change measures that Democrats say will cut the nation’s carbon output by up to 40% by 2030. That is just short of President Biden’s challenge to the country to cut carbon emissions by 50% by 2030.
This new corporate tax will apply to companies that generate a billion dollars in income. It is called a minimum tax because companies will determine their tax bill by doing two calculations. One is the current calculation, which is 21% of profits less deductions and credits. Then the business will apply a flat 15% rate to its annual earnings and whichever total is greater, that is their tax liability. Under the old calculation, some gigantic businesses are able to owe no corporate tax, but under this new calculation they will pay a minimum of 15%.
Democrats will say they didn’t raise taxes, but instead closed a loophole that allowed big companies to avoid paying their fair share of taxes.
The New York Times reported that about 150 of the nation’s biggest companies will be affected:
According to an early estimate from the nonpartisan Joint Committee on Taxation, the tax would most likely apply to about 150 companies annually, and the bulk of them would be manufacturers. That spurred an outcry from manufacturing companies and Republicans, who have been opposed to any policies that scale back the tax cuts that they enacted five years ago.
Although many Democrats acknowledge that the corporate minimum tax was not their first choice of tax hikes, they have embraced it as a political winner.
Senator Ron Wyden of Oregon, the chairman of the Senate Finance Committee, shared Joint Committee on Taxation data on Thursday indicating that in 2019, about 100 to 125 corporations reported financial statement income greater than $1 billion, yet their effective tax rates were lower than 5 percent. The average income reported on financial statements to shareholders was nearly $9 billion, but they paid an average effective tax rate of just 1.1 percent.
“Companies are paying rock-bottom rates while reporting record profits to their shareholders,” Mr. Wyden said.
You might be confused by this minimum tax vs. the worldwide conversation of a “15% global tax.” They are different. The global tax idea is aimed at discouraging companies from jumping across borders to countries that would give them a place to operate tax-free. That notion is still in the works.
Misdiagnosed monkeypox cases
An ER doctor in San Francisco is just one of several voices this weekend who say they are seeing lots of monkeypox cases that were misdiagnosed and left the patient to suffer a lot of unnecessary pain.
Insider reports:
Part of the reason why monkeypox is being underdiagnosed is that this disease outbreak isn't operating like the "textbook" monkeypox presentations of the past, with a classical fever, swollen lymph nodes in the neck, and headache all appearing before pox surface on the face and on the hands.
Instead, monkeypox lesions may be lodged in the rectum, lymph node swelling may be present only in the groin, and it's not unusual for a single pock to be the only marker of a person's entire infection.
Critical teacher shortage disrupting school openings
The Washington Post provides this perspective on what is ahead in the next few weeks:
The teacher shortage in America has hit crisis levels — and school officials everywhere are scrambling to ensure that, as students return to classrooms, someone will be there to educate them.
“I have never seen it this bad,” Dan Domenech, executive director of the School Superintendents Association, said of the teacher shortage. “Right now, it’s number one on the list of issues that are concerning school districts ... necessity is the mother of invention, and hard-pressed districts are going to have to come up with some solutions.”
The Nevada State Education Association estimated that roughly 3,000 teaching jobs remained unfilled across the state’s 17 school districts as of early August. In a January report, the Illinois Association of Regional School Superintendents found that 88 percent of school districts statewide were having “problems with teacher shortages” — while 2,040 teacher openings were either empty or filled with a “less than qualified” hire. And in the Houston area, the largest five school districts are all reporting that between 200 and 1,000 teaching positions remain open.
The teacher shortage is a witches’ brew of pandemic stress mixed with low pay and a growing lack of respect for their profession from politicians and parents who restrict what teachers can say in the classroom.
Stories from around the nation:
Teacher shortage in Houston: KHOU
Severe shortage of teachers in Maryland: The Baltimore Sun
Retired teachers saying “no” to returning to classroom: WXIA-Atlanta
Teacher shortage looms in Madison, Wisconsin: Channel 3000.com
Teacher shortage strains Memphis, Tennessee, schools: WREG TV
Florida needs 9,000 teachers before schools begin: Fox 13 Tampa
Oklahomans face teacher shortage: 9News OKC
Jefferson County (Kentucky) working on 'critical' teacher shortage after more than 430 left last year (WLKY)
Reporting on people ‘Living in Harm’s Way’
The Center for Public Integrity has a marvelous project underway, especially considering the flood and fire stories that are capturing national attention right now. Harm’s Way is produced by Columbia Journalism Investigations in partnership with the Center for Public Integrity and Type Investigations.
The premise of the deep and detailed project begins with this:
The federal government knows that millions of Americans will need to move to avoid the most punishing impacts of climate change, but the country offers little organized assistance for such relocation.
To investigate the impact of climate-driven disasters on communities and whether they’re receiving the assistance they need, we compiled data from federal agencies to assess
1) how many climate-fueled disasters a county had experienced,
2) how much disaster preparedness funding they had received through the Federal Emergency Management Agency and
3) what each county looked like demographically.
Communities stuck on the front lines of the climate crisis need help relocating. The U.S. government isn’t prepared. Read the investigation.
Floods, hurricanes, wildfires: Search to see what aid your county is getting to prepare
Check out how this reporting partnership found communities in harm's way.
The investigation is a discovery of the dollars and cents the federal government is already spending to “mitigate” the damage from natural disasters, county by county. In some cases, we are spending millions of your tax dollars to try to lessen the climate-caused damage to communities and homes. As you browse the data it will eventually occur to you that people should not be living in places that are demonstrably “in harm’s way” again and again. And you will notice how many of the counties in which disasters hit over and over are communities where a fourth or more of the population lives at or near the poverty line.
The investigation found:
The analysis revealed dozens of communities across the country in recent years — and hundreds over the last generation — bearing the brunt of successive disasters, from California to North Carolina, Washington state to Texas. Many are located near the Atlantic, Pacific or Gulf coasts, but the impacts are also felt far from the shoreline, in Missouri, North Dakota, Kentucky and elsewhere. No region of the country has been spared.
Credit card and mortgage spending is way up
In the last couple of years, Americans flush with stimulus money have gotten used to living a certain lifestyle. When the stimulus money stopped and inflation heated up, Americans pulled out their credit cards and kept spending. The Federal Reserve Bank of New York says in the second quarter of 2022 (which ended June 30) credit card spending increased at the fastest rate in 20 years. In that quarter, credit card spending increased 13% compared to the same time period in 2021. The report says, “Balances now stand $2 trillion higher than at the end of 2019, before the COVID-19 pandemic.” It adds, “Mortgage balances rose by $207 billion in the second quarter of 2022 and stood at $11.39 trillion at the end of June.” And “The volume of newly originated auto loans increased to $199 billion, continuing the high volumes seen in dollar terms since Q3 2020.”
It is worth noting that even while household debt is higher right now, so far, Americans are still paying their bills. The percentage of credit card accounts that are in “serious delinquency” rose from 3.04% in 2021 to 3.35% in 2022. The New York Fed said:
Joelle Scally, Administrator of the Center for Microeconomic Data at the New York Fed. "While household balance sheets overall appear to be in a strong position, we are seeing rising delinquencies among subprime and low-income borrowers with rates approaching pre-pandemic levels."
“The share of current debt transitioning into delinquency increased modestly for all debt types but remains historically very low. The delinquency transition rate for credit cards, auto loans, and other debts increased by 0.5 percentage points, with home equity lines of credit increasing by 0.7 percentage points.”
Even while noting that Americans are borrowing more right now, the Fed report kept a remarkably calm tone.
While overall credit profiles thus far remain resilient, the recent uptick in delinquencies in some households suggests that many communities or individuals are experiencing the economy differently. We are seeing a hint of the return of the delinquency and hardship patterns we saw prior to the pandemic. Despite that, many are experiencing a strong economy and robust consumer demand, but the impacts of inflation are apparent in high volumes of borrowing.
Children carrying guns
New CDC data says “one in 15 male and one in 50 female high school students reported carrying a gun for nonrecreational purposes at least once during the preceding 12 months. Gun carrying was more prevalent among those who experienced violence, suicidal ideation or attempts, or substance use.”
Which men outlive women and why
Your whole life you've been told that women outlive men. And generally, that is true. But new research says it all depends on which women and which men. The research used data from 1751 to 2020 (how’s that for a data sample?) and found “Males who are married or have a university degree tend to outlive females who are unmarried or do not have a high school diploma.”
The study concluded:
Although male life expectancy is generally lower than female life expectancy, and male death rates are usually higher at all ages, males have a substantial chance of outliving females. These findings challenge the general impression that ‘men do not live as long as women’ and reveal a more nuanced inequality in lifespans between females and males.
